A SECURE 2.0 summary of provisions, purpose, and timing

SECURE 2.0 has a little something for everyone

Continuing the work begun by the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), SECURE 2.0 Act (SECURE 2.0) clarifies some of the content of the original legislation and also expands into new territory. An early version of the bill stated its purpose as an act to increase retirement savings, simplify and clarify retirement plan rules, and for other purposes.

Find what matters to you in SECURE 2.0

Because the legislation is so expansive, we’ve put together a brief guide of the different types of provisions retirement plan professionals and plan sponsors might be interested in learning more about. 

Provisions that make it easier for employers to offer a plan

• Section 102: Modification of credit for small employer pension start-up costs 
• Section 111: Application of credit for small employer pension plan start-up costs to employers that join an existing plan
• Section 121: New starter 401(k) plan 
• Section 332: SIMPLE IRA plans can be replaced with a safe harbor 401(k) plan midyear 
• Section 348: Cash balance plans

Provisions that make it easier for sponsors to administer a plan

• Section 301: Employee Plans Compliance Resolution System (EPCRS) overpayment recovery 
• Section 304: Updating dollar limits for mandatory distributions 
• Section 305: EPCRS expansion 
• Section 316: Retroactive amendment that increases benefits 
• Section 320: Simplified requirements for unenrolled participants 
• Section 341: Annual notice consolidation 
• Section 345: Annual audits for a group of plans 
• Section 350: Safe harbor for correcting elective deferral failures

Provisions that can help people improve their financial outcomes

• Section 101: Mandatory automatic enrollment for certain plans
• Sections 103 and 104: Saver’s Credit and promotion of Saver’s Credit 
• Section 107: Increased age for required minimum distributions (RMDs)
• Section 109: Higher catch-up limit for participants ages 60 to 63 
• Section 110: Matching contributions for qualified student loan payments 
• Section 113: Small immediate financial incentives for contributing to a plan 
• Sections 116 and 117: Additional nonelective contributions and increased deferral limits permitted in SIMPLE plans 
• Section 120: Exemption for certain auto-portability transactions 
• Section 125: Reduced service requirement for long-term, part-time employees 
• Section 126: Rollovers from 529 plans to Roth IRAs 
• Section 127: Emergency savings accounts linked to individual account plans 
• Section 302: Reduction in excise tax on certain accumulations in qualified retirement plans 
• Section 311: Clarification of repayment of qualified birth or adoption distribution
• Section 325: Exemption of pre-death RMDs from Roth accounts 
• Section 327: Surviving spouse treated as the employee 
• Section 332: SIMPLE IRA plans can be replaced with a safe harbor 401(k) plan midyear 
• Section 603: Catch-up contributions must be made on a Roth basis for participants subject to the Roth catch-up requirement
• Section 604: Optional treatment of employer matching or nonelective contributions as Roth contributions

Provisions that provide participants easier and broader access to their savings

• Section 115: Withdrawals for certain emergency expenses
• Section 127: Emergency savings accounts linked to individual account plans
• Section 311: Clarification of repayment of qualified birth or adoption distribution
• Section 312: Hardship withdrawal participant self-certification
• Section 314: Penalty-free withdrawals for domestic abuse victims
• Section 326: Exception to penalty tax for withdrawals for individuals with a terminal illness
• Section 331: Withdrawal for federally declared disasters 
• Section 334: Withdrawal for certified long-term care insurance premiums and charges

Provisions for defined benefit (DB) plans

• Section 343: DB annual funding notice 
• Section 342: DB lump-sum windows 
• Section 349: Termination of variable premium indexing for DB plans 
• Section 348: Cash balance plans 
• Section 338: Requirement to provide paper statements in certain cases

Timing and effective dates

Most SECURE 2.0 provisions are now in effect, with some applying retroactively, and others phased in over time. The one exception is Section 103 Saver’s Credit, which is generally effective for taxable years beginning after December 31, 2026. While certain provisions are mandatory, many are optional and require action by the plan sponsor. Optional provisions may be adopted by plan sponsors at any time on or after their applicable effective dates, provided the plan’s recordkeeper or service provider is able to support the provision.

Plan amendments related to SECURE 2.0 are generally due by December 31, 2026, or such later date as the Secretary of the Treasury may prescribe. IRS Notice 2026‑33 gives plan sponsors additional time, until December 31, 2027, to adopt amendments under Section 334, permitting optional in‑service withdrawals to pay certified long‑term care insurance premiums and related charges.¹ Additional guidance and potential relief are still needed to address outstanding questions and to help employers implement certain SECURE 2.0 provisions.

SECURE 2.0 brings some new elements to retirement plans

As you can see, SECURE 2.0 uses a wide range of plan rules and features to effect its changes. Some of the elements it relies on commonly show up in retirement plan legislation—such as tax credits, RMDs, and Roth. But SECURE 2.0 has also added (or clarified) some welcome new elements to the retirement savings discussion, such as student loan debt and emergency savings, recognizing the reality Americans of all ages face in saving for retirement.

FAQs

What's the SECURE 2.0 Act, and when was it passed?

The SECURE 2.0 Act (Setting Every Community Up for Retirement Enhancement) was signed into law on December 29, 2022. It brought meaningful changes to defined contribution plans, defined benefit plans, and IRAs, building on the original 2019 SECURE Act. The provisions are designed to make it easier for employers to offer retirement plans and improve retirement outcomes.

When do SECURE 2.0 provisions go into effect?

SECURE 2.0 provisions have staggered effective dates. Most provisions are now in effect, with some applying retroactively, and others phased in over time. The Saver's Credit becomes effective for taxable years beginning after December 31, 2026. Plan amendments are due by December 31, 2026. While certain provisions are mandatory, many are optional and require action by the plan sponsor. Optional provisions may be adopted by plan sponsors at any time on or after their applicable effective dates, provided the plan’s recordkeeper or service provider is able to support the provision.

What types of changes does SECURE 2.0 make?

SECURE 2.0 addresses five key areas:

1 Making it easier for employers to offer retirement plans

2 Simplifying plan administration for sponsors

3 Improving participants' financial outcomes through enhanced savings features

4 Expanding access to retirement funds for emergencies and hardships

5 Updating defined benefit plan rules

The legislation uses tax credits, contribution limits, and new plan features to achieve these goals.

Which SECURE 2.0 provisions affect retirement plan participants directly?

SECURE 2.0 includes several provisions that directly affect participants.  Except for automatic enrollment for certain new plans and the increase in the required minimum distribution age, the provisions listed below are generally optional and apply only if adopted by the plan sponsor.

• Automatic enrollment for certain new plans
• Higher catch-up contributions for ages 60-63
• Increased required minimum distribution age
• Matching contributions for qualified student loan payments
• Emergency savings accounts
• Penalty-free emergency withdrawals
• Hardship withdrawal participant self-certification
• Mandatory Roth catch-up contributions for participants subject to the Roth catch-up requirement
• Withdrawals for certain long-term care insurance premiums and charges

These provisions are designed to improve retirement savings accessibility and flexibility.